Comment by grecy | Hacker News Reader

Comment by grecy | Hacker News Reader

In first world countries it's not difficult at all given two conditions.

1. You have a good job (probably - but not necessarily - a professional job)

2. You are willing to spend less money than other people.

And in fact, point 2 is way more important than point 1.

The secret to having more money is not to earn more, it's to spend less.

I'm 36 and I have quit and done what I wanted twice in my life now - once for 2 years I drove AK-Argentina, now I'm well over 2 years driving around Africa. Before both jaunts I earned a mere fraction of what Bay area salaries appear to be. Before Argentina my salary was $48k CAD.

The trick is simply to spend less. Don't upgrade your phone (or don't even have one), don't eat out. Walk or ride to work, no TV, no Netflix, etc. etc. Pretty soon you'll find you have way more money than you actually need, and you can choose to work either part time, or not work at all for a while.

If you were willing to put in 10-15 years of this frugal life, you'd have enough money to never work again, easily.

EDIT: Because everyone always asks how I do it, I wrote a book about how I do this with my life: http://theroadchoseme.com/work-less-to-live-your-dreams

I thought you were broke and in debt when you left for Africa? That doesn't make your post wrong, but you're really shoehorning your book into a thread that doesn't have much to do with your path.

I was not even close to broke or in debt, and I'm still not 2.5 years later. Reddit read my story and came up with that story, when the story really was "I screwed up and lost some budgeted travel money, now I'll have to be more careful about my spendings".

Sorry if I'm wrong, but I thought there was some problem with the engine in your Jeep and you had to buy a new one and finance the trip on credit - I was going off what I remember of your words, not Reddit people.

If you managed to make it without debt because of your book sales, congratulations! That's impressive.

I did lose some money,yes, but it was not nearly enough to mean I had to finance the trip on credit.

Also book sales are not the reason, the reason is that I cut down on expenses. I camped for free for months and months in West Africa, spending as little as $500/mo for absolutely everything for many months in a row.

> The secret to having more money is not to earn more, it's to spend less.

I honestly thought it was the complete opposite? The whole "being poor is expensive" thing? That buying expensive shoes is economically better longer term vs buying cheap shoes?

Typing a paragraph of nuance isn't as easy.

Of course BIFL is better if you can afford it. It also means not keeping up with the Joneses, spending money out all the time, buying more than you need.

You're both right, but you're both speaking casually so it's hard to understand precisely what you're saying. Here's my take on it:

At least from a perspective of early retirement, if you can change your lifestyle so you can sustainably spend less, then (i) while you are working, you can save more money, due to lower expenses, and (ii) provided you are willing to continue living frugally after retirement, you don't need to build up as much capital to fund retirements from investment returns, as your post-retirement expenses are also lower. I think the second factor makes a bigger impact than the former one.

The point you make is also a good one: people with more wealth and resources are in a better position to make longer-term investments, which can help them save or make even more money in the long run.

The two heuristics "spend less" and "earn more" aren't always in conflict, you can often find opportunities that strictly improve one without damaging the other one.

I'm not the GP, but spending less is not the same as being poor. The former is about having options, the latter is lack of options. Poor people have to buy the cheaper shoes because that's all they have enough money for (compared to a wealthier person who made the decision based on average cost over time, even if the initial outlay was more).

The reason that earning more never works out is because the more you work (and attempt to earn) your actual money in hand asymptotes and you're not getting reward for your effort & time.

Taxes go up the more you earn. You'll spend more on food and stuff the more you work because you're more tired, you'll spend more when you earn more (b/c the goldfish fills the bowl), you will be surrounded by people who earn more, so you'll live the "high life", etc. etc.

Also it's a bit of a play on words, because when you spend less, you'll realize you need less, and so it will appear you have more.

Of course you're not going to achieve FIRE if you spend all the money you earn, the whole point is to save the most you can, if you can earn more of course, go for it, but for a lot of people it's out of reach, so it would be pointless to recommend that.

It is

If you were making $50,000/year you might be able to save $10,000-$20,000 a year by cutting spending. However you'd be able to save infinity more by increasing earnings. If you were making $50,000 and got a raise and were now making $100,000/year a year that would let you save $50,000/year. You aren't going to save $50,000/year by cutting expenses.

There's no theoretical limit to your earnings, however, you can only save at most 100% of your salary.

It's also a LOT (and I mean a lot) easier to cut spending when you earn more.

I think what the GP meant to say was if you increase spending when you increase earnings you'll never save any money.

> If you were making $50,000 and got a raise and were now making $100,000/year a year that would let you save $50,000/year.

These are the kind of simplifications that get thrown around all the time that are simply wrong.

You're forgetting all the extra tax you'll have to pay to earn that extra $50,000, so right from the start you are not getting anywhere near $50k extra into your account. You're forgetting it will cost you more to earn that extra (better work clothes, longer hours means buying more food, require better phone, on call, etc. etc.) and you're forgetting that when you earn more you'll spend more.

Certainly if you get a pay rise from $50k to $100k you have the potential to save more, but I still stand by the statement that it's not the best way to go about it, if in fact your goal is to work less (reduced hours or retirement). That's a very important point to keep in mind - the goal here isn't to save as much money as humanly possible, the goal here is to work less.

Salary goes up $50k, tax goes up $15k, expenses climb by $6000, net income goes up by $29k. Saving $29k on $50k is harder than saving $60k on $100k.

> longer hours means buying more food

this is where you're failing to understand the frugal mindset. People with a frugal mindset rarely if ever buy more food (if you mean, not make their own meals), no matter their work hours.

I'm not failing to understand it, I live it.

You wind up spending more on food because you're utterly exhausted from working longer hours. It's not that you want to, it's that you get backed into a corner and don't have a choice.

When you have more money, you won't fall into poverty traps, even if you spend less.

For example, suppose you were a middle-to-high earner and you lived well below your means. If you face financial burdens like health issues, accidents or layoffs, you'll have a liquid cushion to fall back upon.

Those without liquidity will need to find the funds elsewhere. Elsewhere is an entire debt and rent-seeking industry that tends to prey upon people that do not have the means to defend themselves legally, nor do they have the means to escape that market into one with terms that are a bit more fair.

From what I've seen, it seems to be the other way around.

As we get better linearly (e.g. code faster), our income increases somewhat exponentially. So, it seems like a better strategy to try to earn more.

Not to mention that having more money will potentially earn you more as well.

Ranked tennis players and their earnings are a good example. It seems true in a company setting as well.

This is such an important point. I have friends who routinely go out for $300+ dinners, and then complain about having near empty savings account.

It’s honestly quite shocking, coming from software engineers who are (supposedly) analytically/numerically minded.

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